Thursday, 21 July 2016

French President Francois Hollande will tell Theresa May he wants to start talks on the UK's exit from the EU (1) as soon as possible, when they meet later. The UK's new prime minister has said she does not want to start the formal Brexit process until 2017.

But Mr Hollande has rejected any "pre-negotiations" (2) - and said the UK could not access the EU free market without accepting free movement of people(3).

... He said there should be no pre-negotiations before full and formal exit talks and added: "Access to the single market cannot be guaranteed unless free movement of workers is respected.(4)

... Pascal Lamy, a former World Trade Organization director general who was also chief of staff to ex-EU Commission president Jacques Delors, also said European leaders wanted to know what Mrs May was looking for. "What sort of relationship do you have in mind with the European Union?" he asked.(5)

Wot?

1. He can speak for France but he does not speak for the EU as a whole.

2. If he wants talks to begin, then why would it matter whether they are "formal" (meaning that the UK has applied to leave under Article 50) or "pre-negotiations" (meaning it hasn't)?

3. Free movement of people is an EU obsession, but is quite a separate concept from free trade in goods or services, which in turn could be dealt with separately.

We have plenty of precedents, such as the customs union between the EU and Turkey:

Goods may travel between the two entities without any customs restrictions. The Customs Union does not cover essential economic areas such as agriculture (to which bilateral trade concessions apply), services or public procurement.

They also agreed to a common foreign tariff, which sort of makes sense. If Turkish import tariff for Chinese goods is lower than the EU tariff, then people in the EU would import Chinese goods via Turkey.

UPDATE. The Fat Bigot points out in the comments: if Hollande has started harping on about free movement before Art 50 has been triggered, then he is engaging in pre-negotiations himself.

4. Real weasel words here. "[C]annot be guaranteed" is meaningless. A doctor cannot guarantee that a treatment will work, even though it usually does. "[U]nless free movement of workers is respected" is even vaguer. I can respect other people's places of worship and superstitions despite being an atheist who thinks it is all a load of cobblers and never takes part.

5. Lamy is not authorised to negotiate for the EU either. And I think the UK has made it pretty clear what it wants.

As I am weary of pointing out the whole concept of a free trade agreement is an oxymoron. In any event WTO rules specify the international rules to which the EU is subject.IMHO the reason why the EU clings to the free movement condition is that once it allows one concession it is on the road to its own oblivion.

Its been obvious from the start that belonging to this Free Trade Agreement is conditional on the four freedoms one of which is the free movement of labour.If the Thatcherite thickies are now saying they want to break one of the cardinal principles of the agreement, they are going to have to get used to the idea that No free movement= no free trade area of 500 mill people. The Thatcherite subversives went back hundreds of years to inflict Laissez faire principles on its coal industry ( it being too hard to study the Laissez faire philosophy which insists on land value Tax to stop the obvious danger of just increasing land prices) and are now stuck with an electorate in the former coal fields which is fascist and does not respect the founding principles of the EU. So being booted out is richly deserved.The Thickies, given a sense of entitlement by their dreadful schools and universities which need closing immediately,had the choice of subsidisng the coal industry (when we had the boon of North Sea Oil) or subsidising homeownership and plumped unerringly for the wrong choice.There be ways of finessing this predicament but the nasty fascist wankers are not in a position to do so, when their bargaining position is "We want to have a special fascist exemption".

Try and argue on the facts of the matter.We have an electorate which is keen on blaming immigrants and deporting them (something Theresa May has not yet ruled out). They should be blaming Thicky Thatcher ( thick she because she opted for an ancient laissez faire policy without bothering to read an O level history which shows laizzez faire was a spin-off of Phyiocrat or land value theory). She deindustrialised huge swathes of Britain particularly coalfields where Brexit is strong. Not having reindustrialised Phoenix like ie without any help from her or other Conservative governments (including Blair's) these areas are voting fascist because they are seeking to victimise other working class people.

DBC, free trade and free movement are quite separate topics. There is no logical requirement to link the two. That is what the Eurocrats don't understand. You can have one without the other, neither or both.

It should be obvious I am not a Trot so cordially fuck off on that one.It was Mark who made all kind of excuses for feeding people anti-immigrant propaganda from his old party (UKIP): the principal one being that the poor dears wouldn't understand all the clever economic stuff so needed to be motivated by malignant emotion.Now this right-wing extremist nonsense has blown up in his face and we are out of the European Trade Area on the strength of it, he should 1) admit he got it all wrong (no hopes there, then); 2)face up to the fact that freedom of movement is one of the four fundamental beliefs of the EU and we shouldn't have joined if we found it not simpatico. I rather resent being lumped in with a country which is squealing "We joined this club to make a lot of money out of it and now we discover there's rules!!"Freedom of movement is a fact of the matter and we are now in the worst possible position to do anything about it on the debate/ reform front. Of course Marine le Pen might open a second front but the fact that she is a fascist will offend you lot who see nothing at all wrong in all those areas deindustrialised by a housewife eccentric looking to bash immigrants while taking State Money in guaranteed increased house prices.Fascism? Never! Its good old British hypocrisy; nothing more natural (since 1963) in raising house prices to make people suffer as long as we lovable muddleheads get elected.

L. DBCR is a Trot? [must be true MW endorsed it]. Can you direct me to the part of his post that leads you to conclude he is attracted to or supportive of the idea of institution of socialism by 'advocation of worldwide revolution'?The 'advocation of worldwide revolution' bit being that which marks out a Trotskyite from any other type of marxist/socialist. Or was it just meant as a sort of facile ad hominem?

As for the historical points made in his post, most of it seems fair even if arguable. Thatcher 'arguably' did 'choose' or at least 'welcomed as desirable' the large scale deindustrialisation of huge swathes of the UK in the 'secure' knowledge that North Sea oil revenues would buttress any such policy. Furthermore that the opening up of freedom of movement of capital and ushering in of competition in the City [big bang] would allow the UK economy to throw most of it's industrial eggs [as it were] in for the financial sector 'basket'. Risk taking banks were the new darlings. She neglected/downplayed investment, satisfied that much easier credit conditions which launched what we now call consumerism could help drive the economy forward even without big investment, negligent to the subsequent 80's boom [the supply side miracle that wasn't] and the rapid escalation of house prices as something now deemed desirable in and of itself. Debt over equity ruled through Thatcher to New Labour and persists to this day. She did it without understanding that a 'northern/provincial' generation would effectively be left behind. That generation are today the stuff of UKIP and basically blame immigrants for most if not all of their woes whilst many of that generation's progeny are engaging in verbal and physical abuse of said migrants, emboldened as it were by Brexit.

Sure you can have 'free trade' without 'free movement' in the EU, but only at some economic cost. If capital is to be mobile whilst labour is not we should expect that it will be to the detriment of trade with the EU. There is not a single EU government [maybe Hungary?] that I am aware of that has suggested any such compromise could be in the offing whilst every prominent EU figure thus far quoted has said 'freedom of movement' is negotiable but only if freedom of trade/access is similarly negotiable. Remember, to get any compromise of such 'freedom of movement' would require ratification by 32 separate EU bodies/states.

Funny that a blog generally inclined toward a lot of blather about the wonder of free markets [well Lola anyway] seems quite content when restrictions to the 'free market' of labour are proposed [L again].

If there is free movement of labour within an area, wages tend to even out; wages in the higher pay areas will drop, leading to accusations of Johnny Foreigner taking jobs.

The problem become worse where land is not freely available at the margins, as work opportunities are then constrained.

If you want to have free movement of people, then the participating countries must all operate a land value taxation system to ensure that land is freely available at the margin. If they do not do this, there will be tension and worse.

@paul156 - what is this "capital" which is moving around freely? How many manufacturing plants are being dismantled and re-erected somewhere else? Why would this be advantageous to anyone?

PC, "Funny that a blog generally inclined toward a lot of blather about the wonder of free markets [well Lola anyway] seems quite content when restrictions to the 'free market' of labour are proposed [L again]."

You can't win an argument by somebody by telling him that he said something he never said. It is just really irritating and makes you look stupid.

Show me a few posts on this blog or comments from any of us which are overtly anti-immigrant*. You will find it very difficult because there aren't any.

* I don't like Islam, full stop, regards of who practises it or where they come from. That is not anti-immigrant or racist.

@paul 156 I think everybody on here should thank you for giving such a masterly and thorough account of origins of the present mess .I will certainly refer it to it in future rather than skating across a lot of thin ice in the arguments.&Physio. In Northampton Avon cosmetics fucked off to Poland and opened their factory there rather than honour any commitment to the economic welfare of the citizens tout de suite.Their excuse was that the entire British cosmetics had decamped there already ,not that there was any great outcry. Likewise British Timken, one of the few genuinely engineering factories in the town scarpered to Poland at the same time; their very big grounds (once home to a prestigious national athletics meet)are now covered in bijou luxury houses.

DBCR. Cheers. I find it a bit tedious that folks who complain of rudeness (as both MW and L have done with me previously) are so easily able to make exceptions for themselves when it suits.

Physiocrat. Here's what the EU means by 'free movement of capital'.http://ec.europa.eu/finance/capital/overview_en.htm it can of course entail shutting factories and reopening them elsewhere and DBCR has given you some examples you apparently wanted but is hardly restricted to that narrow definition. And as for as the EU where free movement of capital is concerned it is not restricted to EU states but also between EU states and non EU states.

MW. "You can't win an argument by somebody by telling him that he said something he never said." ...whatever that means, but agreed, I think."Show me a few posts on this blog or comments from any of us which are overtly anti-immigrant".Why? Or put it this way; Show me the part of my post where I claim that 'any of you' are overtly anti immigrant? You won't because I haven't.

This is what I did state though: "Funny that a blog generally inclined toward a lot of blather about the wonder of free markets [well Lola anyway] seems quite content when restrictions to the 'free market' of labour are proposed [L again]."Which leads me to the conclusion that 'you can't win an argument by somebody by telling him that he said something he never said'.

P156 et al.There is a difference between 'free movement of people' and 'free movement of labour'. People are not necessarily labour. And the EU is not (yet) 'one country', unlike the USA.We do have free movement of people, within the UK. No-one minds someone moving from Glasgow to London in search of work, or benefits. But the UK still notionally has a 'border' with France etc. Also you have to think where the State comes from. Essentially it is the accretion of land that has come to be considered by its population to have a set of rules and responsibilities and in which the indigenous population can enjoy secure property rights. And the first duty of government is defence of the realm. In which case unrestricted immigration is an assault on those property rights. So controlling immigration is absolutely justifiable..

OTH free movement of labour is about not stopping employers from employing who they think is the best man for the job. And as an an employer I can assure you that is not just or even only a price based decision. I am sitting here watching HUngarian GP qualifying and as an example as to how free movement of labour benefits production look no further than any of the teams on the F1 grid. Every team is positive evidence of the success of multi-national employment.

Just to comment of something DBCR or P156 said the reason why we manage to have expensive labour and low pay at the same time is because we endure high rents, high taxes and huge dead-weight regulatory costs. Cure those and Timken will be back.

"Thatcher 'arguably' did 'choose' or at least 'welcomed as desirable' the large scale deindustrialisation of huge swathes of the UK"

If we are going back into history, can you tell me if any of the industries that Thatcher closed down were actually making any money and whether any of them were not owned by the state. AFAICR, the "large scale deindustrialisation" involved closing down loss-making publicly owned industries, but it was some time ago and my memory might be at fault.

B. Your memory is accurate. What everyone selectively forgets is that Thatcher's City reforms were based on breaking down the special privileges enjoyed by various groups like Stockbrokers or Jobbers, and Banks. And open the City up to competition. She also introduced regulation, on the basis that it was there to encourage competition so that old privileged monopolies could not become private monopolies. Unfortunately she did not reform the basic banking settlement or see how regulation bureaucrats would capitalise on regulatory power to move us to an era of 'regulationism.

Lets be clear: Mark did call me a Trot, which was somewhat hurtful as I considered him a friend. For example, I find Lola's constant definition of things like Socialism, which he knows nothing about and cares less, tedious and pointless in the extreme. However I do respect him for him being the only Conservative I know willing to take this party to task on the land price inflation issue. So he has to be cut a great deal of slack.So I do not take kindly to being called a Trot for attacking the UKIP version of Brexit which consists of sheer anti-immigrant hate speech which Mark has supported because the electorate could not grasp the technical issues .In the meantime Hollande has dispelled the fuzzy airheaded notion thatBritain can have full access to the big European market without agreeing to full freedom of movement.As was perfectly obvious would happen.So it is quite possible that being hit round the kisser by the wet kipper of this reality will cause the totally unprincipled Tories to junk the whole Brexit scheme and say it was all a misunderstanding. They junked the previous Austerity scheme without a backward glance. They appear to be the first post structuralist political party where words have no generally accepted meaning.

DBCR. Oh come on. It's MW's blog. He can say what he likes. In any event I have supported your right to be wrong (!).And I am not Conservative, and absolutely no Toreee. Slightly conservative I may be, in that I support institutions that have been tried and tested over time. The Common Law for example.As to Socialism, I may or may not 'know anything about it' but observationally over the last 100 or so years in its name Nations have been bankrupted, wars have been fought, genocide has been practiced, eugenics has been preached and economic and individual liberty has been sacrificed, so forgive me for being less that charitable about 'socialists'. (in any event most 'good' socialists I know are leftish libertarian - they just don't know it yet).Hollande is not the EU. And France is just one nation. If the rest want a free trade deal (oxymoron) with us, it'll happen whatever he says. Personally, I really couldn't care less whether or not we get a FTD. Any tariff the EU imposes will be incident on its own citizens, so good luck with that. Anyway, we can have WTO rules whatever the EU decides. Would you rather have 500m prospective customers or 7Bn? (In passing I am exploring an Offshore Branch of my business - the demand is there I just need the capital. Anyone?)Having achieved a referendum win we can now concentrate on restoring democratic accountability (one of my key reasons for voting out), start dismantling the bureaucratic state, restore the rule of law (by removing rule by capricious bureaucrat), get out from under a humungous contingent liability to the Euro and EU banking system, sort out our finances and control our borders (not the same thing as anti-immigrant), and GO ABOUT GENUINELY REFORMING THE TAX CODE AND CUTTING TAXES.

But like you I despair of the Torees, especially with absence of a coherent Opposition.

As to calling you a 'Trot', the thing is you have lapsed into a sort of Trot Speak style. e.g. 'Thickie Thatcher'. You may not like her. You may disagree with her policies and legacy. She made errors, yes. (Not coupling reforming the City with reforming the tax code - i.e. LVT, etc.). But 'thick' she was not.

Hey..... this is my comment thread!!!! - can we get back to why we need trade negotiators AT ALL. ;-D

@L said "the reason why we manage to have expensive labour and low pay at the same time is because we endure high rents, high taxes and huge dead-weight regulatory costs"

Exactly - as an employer I see this. In the UK (manufacturing sector) the mantra is 'automate or die'. At my company, we produce TWICE as many units per hour as we did 10 years ago with the same labour.

Take a look at France/much of the EU - lots of regulation/employment taxes and high wages/non-cash benefits for those IN WORK = high productivity due to automation. GREAT. But what about youth unemployment. V V Bad.

Oh... and all you people in comfortable 'middle class' or 'white collar' jobs... AI is going to do the same to you!

S. My business too. If it wasn't for IT I would need a lot more people AND even then I couldn't deliver the service I do deliver now. I found an excellent paper the other day (lost the link) which showed conclusively that the minimum wage was 'punishing' the young and inexperienced. Add to the MW (or Living Wage) all the employment rules and payroll taxes it is no wonder we have unemployment or things like zero hours contracts (I have someone on one of those and he loves it).

@L You did not call me a Trot: Mark did. You said I sounded like a Trot because of phrases like "Thicky Thatcher".Thatcher was outstandingly thick and only became popular when she visited State violence on the miners and the Argies and started selling off State housing. Do not forget it was the Conservatives who flung her out of Downing Street and left her sobbing in self pity on her way to the car, sights which people in the East End celebrated thankfully. I imagine many of those Tories who found her insufferable also called her thick .They were not Trots.At all events , it is not reasonable to call a Lefty land taxer a Trot simply because he won't join in with the deplorable UKIP idea of leaving the EU by encouraging anti immigrant prejudice. This tactic has nothing to do with Land Tax and has made LVT more distant because the Homeownerist rabble take the government's money to toe the right wing line only while house prices continue to rise.Also there is altogether too much deference to politicians in this country who have supervised putting up house prices and putting people on contracts that are like Mile Ashley's , or are self employment scams that leave workers without sick pay or pensions. The none-too-intelligent Osborne tried to enforce a higher minimum wage and the wonderful business community rejigged pay structures so that workers got less.There should be space in the political discourse for terms like: total shits .Remind me of any good David Cameron did .

"the UKIP version of Brexit which consists of sheer anti-immigrant hate speech which Mark has supported because the electorate could not grasp the technical issues ."

If there is one thing that the EU referendum and the "Corbyn affair" has sharply highlighted, it is the extent to which the news media are part of the establishment and the elite. The establishment is, generally, pro-EU and anti-Corbyn, for the same reason: by and large, the "common man" is against the establishment and therefore on the side of Brexit and Corbyn. Thus the airtime given to the Brexiters concentrated on the more loony of their numbers (Johnson, Farage) and the more outrageous of their claims, leaving the field clear for accusation of "all leave voters are thick/racist/ etc.etc." now that the leave camp have won the referendum. The electorate didn't have to "grasp the technical issues": they could see that the EU and the Tory government that foolishly aligned itself with the EU stood for elitism and privilege. Does the establishment want to admit it got "hit round the kisser by the wet kipper of this reality" (excellent phrase, BTW). No of course it bloody well doesn't. Hence talk of "sheer anti-immigrant hate speech" and all the rest of it in most of the news media and all over the internet. It's not really any different from a bloke who's just been slapped in the face by his wife saying "it's just her time of the month", when actually she'd just found out he'd been having an affair.

"Hollande is not the EU. And France is just one nation. If the rest want a free trade deal (oxymoron) with us, it'll happen whatever he says." L

Nope. In order to get any meaningful alterations to free movement of labour without restrictions to access and significant budgetary contributions is bordering on the delusional. As P. Wintour has said "To secure an EEA agreement, UK must avoid a veto by Swiss, 3 EFTA countries, 27 EU countries and European Parliament. 32 vetoes." As I understand it any deal has to get at least 27 of the EU states on board with at least 65% of the EU population. So France realistically, has to be agreeable, because you can forget the East Europeans/Baltic states on free movement of 'their' labour. More likely is simply no article 50 trigger. We carry on until the next election and then people get to vote on taking an economically destructive exit with strong migration controls or a more conciliatory Norway type deal and by then we may see real damage to the UK economy post brexit.

As for the notion that bureaucracy is the victim of brexit, oh please. Haven't you heard the Treasury and Civil service will be looking at large increases in staffing levels [quite apart form the hundreds of trade negotiators that you insist we don't need] in order to cope with extricating UK laws and regulations from the EU machine. A generation long process.

And L, I hear the complaints about minimum wage this and regulatory burden that but most of the regulatory burdens on business that get aired and complained about are home grown. Apprenticeship levy, pension enrolment, living wage etc etc nothing to do with the EU, Euro work directives we've been assured by brexiters during the campaign will stay. Maternity leave will stay and so on. So obviously, leaving the EU isn't going to make diddly squat difference to most business as far as regulatory burden is concerned. And by almost every measure Germany and the Nordic states have greater regulatory burden on business yet manage higher living standards. Most have higher taxes too but that would be too much in one go for you to admit...lest your world view be rendered largely fantasy based as it is on biases and papers that you can't ever quite remember the sources of.

DBCR. Y'see. There you go again. Thatcher was not 'thick' at all. She was intelligent. Just because you disagree with her does not make her thick. Yes, she made errors. Right to buy discounts among them. And she didn't square the circle of combining breaking down FS privileges with reforming the banks and reforming the tax system. But neither did pretty well all the Labour party people I can immediately think of.So, yes criticise her actions and legacy. But you devalue your arguments with u justifiable adjectives and personal vitriol.

B. I made a statement of fact. You can argue we had to shut down the coal mines, shipyards when we did and flog off telecoms to Sid etc because third world states were able to produce the same for much less. [third world states including German coal and Japanese ships etc] and why invest in telecoms and utilities when you can instead enrich the City in a share give away and buy in cheap energy/generation when you need it from yet more thrid world countries as and when. {Hinckley Point/France/EDF and so on]. You could also make a case for greater investment. We chose oil and casino banks. Regardless, those areas ravaged by the largely 'political' decisions were effectively left to rot for a couple of decades. It's in some significant part those same areas which today are most bitterly opposed to what they see as 'elites' whether in London or Brussels.

P156.Para 1 - a quotePara 2 - You will note that I qualified my previous comment by adding the bit about WTO rules? Who cares what the EU does. In any event Germany will want to sell us cars. So a deal is likely.Para 3. You are missing my point. I have never said that all UK bureaucracy is down to the EU. I have said that the style of that bureaucracy - a complete absence of legal, financial and democratic accountability and none of the bureaucrats having any skin in the game - mirrors the EU. I am also on record of saying, before Brexit, that if we did Brexit then all these bureaucrats would claim that as a result more bureaucrats would be needed. Bureaucracies never let a crisis go to waste, or they invent them.But now that we can get more immediate democratic accountability we have more chance of sorting them out.Para 4. Indeed. Your list is a good one. But as an example of the mess, the FCA rule book has over 1 million paragraphs. No-one knows what's in it. It is designed as a trap to permit arbitrary interpretation by capricious bureaucrats and empower them to make similarly arbitrary sanctions. It is made on the style of the EU. We are now more able to take it on as no-one can hide behind the 'it's the EU' meme.I fully expect this whole 'reboot' to take a generation.In re Norway and Germany. Norway is small. It's effectively an oil sheikdom in the wrong place without the sunshine. Germany has been what I think of as mercantilist (I know there are various definitions of that). It's going to find out that that policy has two edges. (BTW I really like Germany and the Germans. Just been there on my holidays. Lovely place.)

L I fear you have limited life experience probably because of your relative youth but I can assure you that extreme right-wingers with science degrees were a nightmare in Thatcher's formative (more like congealing) years. This quote from Wikipedia speaks volumes of the "young" Thatcher: " In 1948 she applied for a job at ICI but was rejected after the personnel department assessed her as "headstrong. obstinate and dangerously self-opinionated." How could your opinions be dangerous in a science lab? Fact is she was unemployable.

So you did. I didn't disagree with it. I asked a question. You didn't answer it. Instead you conflated the closure of loss-making state-owned industries (AFAICR and you haven't said that my memory is at fault) with the flogging off of profitable state owned industries, or even loss-making state-owned industries that went on to make a profit in the private sector, which wasn't the point at issue.

Once you have the state propping up loss-making state-owned industries, the decision to close has to be political. The state can always afford to carry on propping up those industries, even if they are producing nothing of any value whatever. What a government can or cannot afford is a political decision, not an economic one as it, in theory, has access to limitless supplies of money.

As to bad investment decisions, these had been made decades before, when the UK decided to invest in exciting things like armaments and aerospace, in which we were always going to be outperformed by the USA, instead of boring things like cars and washing machines, whilst handing over our nascent computer industry lock, stock and barrel to the same USA.

S, I don't think any of us know why we need so many trade negotiators, or even free trade agreements. Each country can do its own list of banned things (drugs, non-MOT compliant cars, weapons, whatever) which it also applies to domestic producers and that should be the end of it.

PC: "This is what I did state though: "Funny that a blog generally inclined toward a lot of blather about the wonder of free markets [well Lola anyway] seems quite content when restrictions to the 'free market' of labour are proposed [L again]."

Aha, I thought you were doing classic British understatement and accusing one or all of us of being anti-immigrant or even racist.

If you literally meant "we are not too convinced that there are any huge economic benefits of large scale immigration (bearing in mind that even if positive for the economy as a whole, there will be winners and losers among native Brits) and opposed to people coming here who really don't want to even try and fit in", then yes, that is probably the overall view here.

Speaking personally, I am perfectly happy with free movement of European people within Europe (including the UK of course, doesn't bother me and not a reason I voted Leave. But if the UK govt were to impose some restrictions (and other European countries impose restrictions on UK people), then it wouldn't bother me too much either. It's no biggie either way.

But a mistake the EU is making is to try and tie in two separate topics.

DBC, OK, I called you a Trot)sky-ite), I didn't realise it was an insult, is there a particular term you would prefer, or shall we stick with "Lefty land taxer"?